Secretary of State William F. Galvin on Tuesday charged a Marlborough marketer of online phone service with running a billion-dollar pyramid scheme, primarily targeting Brazilian immigrants.

TelexFREE Inc. has offered fraudulent and unregistered securities in Massachusetts by running a multi-level marketing scheme, Galvin’s office alleged in its complaint, a copy of which was reviewed by the Globe, attracting as much as $90 million in the Massachusetts alone.

the company filed for federal bankruptcy protection Monday in Nevada, according to a note on its website.

Galvin’s office had been investigating TelexFREE’s alleged scheme for several months, and with Tuesday’s action aimed to protect some assets for victims – an effort that could be thwarted by the bankruptcy filing.

“They clearly are responding to the fact that an investigation was underway,’’ Galvin said in an interview. “Now the thing is to act promptly and get whatever we can for these people.’’

Meanwhile as late as yesterday, TelexFree CEO in hiding Stuart Macmillan and Director of Business Development were busy reassuring affiliates the company would carry on despite the bankruptcy filing and SEC investigation.

An administrative complaint has been filed against TelexFree by the Securities Division of Massachusetts, filed early Tuesday morning on the 15th.

In the complaint, Massachusetts allege TelexFree

engaged in the fraudulent offer and sale of unregistered securities in the Commonwealth of Massachusetts, in violation of the (Securities) Act and regulations.

Mirroring the BehindMLM TelexFree review I wrote all the way back in July 2012, here’s how the Securities Division describe TelexFree:

While touted as a paradigm shift in telecommunications and advertising, TelexFree is merely a veiled pyramid and Ponzi scheme.

TelexFree’s scheme borrows elements from the once common phone card frauds of the mid 2000s while supercharging its reach though (sic) an elaborate internet-marketing machine.

TelexFree has raised over $90,000,000 in Massachusetts and nearly $1,000,000,000 worldwide. Despite such an impressive capital raise, TelexFree operations are untenable without a continuous influx of new capital.

Indeed the financial basis of the TelexFree scheme centers on the recruitment of additional participants and placing online advertisements – not sales of 99TelexFree VOIP programs.

Readers of BehindMLM will not that I’ve long referred to TelexFree’s VOIP service as facade to front their AdCentral Ponzi scheme. For anyone still doubtful, here it is spelled out for you:

TelexFree’s business model purportedly revolves centers on the sale of its VOIP program 99TelexFree, despite the fact that TelexFree’s president testified to having limited knowledge of VOIP and never having been in the telecom business.

Using technology borrowed from Disk A Vontade (Ozedit: Carlos Wanzeler’s old company), a nearly identical venture with common management, TelexFree re-branded the VOIP program, offering it for a flat monthly fee of $49.90.

Unlike Disk A Vontade however, TelexFree coupled the VOIP program with a wildly lucrative and fraudulent scheme.

Using VOIP as a facade, TelexFree ran the AdCentral Ponzi investment scheme for almost two years. The business model was simple, use newly invested affiliate money to pay out existing affiliate investors.

The core of the passive income scheme centers around the investment of either $289 or $1375.

A participant who invests $289 receives one advertisement kit and ten VOIP programs. A participant who invests $1375 receives five advertisement kits and fifty VOIP programs.

The “advertisement kits” the Securities Division mention is of course the AdCentral investment positions we’re all familiar with.

The TelexFree advertisement kit enables participants to generate a return by by posting pre-written advertisements, to pre-determined websites, through an automated TelexFree system.

A participant’s daily use of the advertisement kits generates investment returns without the need for any VOIP program sales.

Over the course of a year, a participant who initially invests $289 and does nothing more than place one advertisement per day can receive profit of at least $681 – a return in excess of 200%.

Alternatively, a participant who initially invests $1375 and does nothing more than place five advertisements per day can receive profit of at least $3675 – a return in excess of 250%.

This feature alone has attracted thousands of individuals to invest in TelexFree.

Hidden among TelexFree’s bonus structure and recruitment commissions is the fact that TelexFree participants may self-qualify.

Indeed, as testified by participants (Ozedit: Ooh, looks like the sneaky SEC went behind Labriola’s back and interviewed his investors without his permission), a participant my invest in more than advertisement kit and personally purchase the VOIP program to earn bonuses (Ozedit: ROIs).

Thus, the participant may purchase a VOIP program, never use the program, and still qualify for additional income. Without ever selling the VOIP program, the participant receives a return far in excess of the 200-250% guaranteed return.

And mixed in with the Ponzi scheme side of TelexFree, was a dose of good ‘ol fashioned pyramid scheme…

The passive income scheme generates further returns for participants through various bonus structures and recruitment commissions. TelexFree tailors each of the additional income streams to incentivize recruitment.

By merely recruiting one individual into the TelexFree scheme, a participant can receive as much as $100. By recruiting multiple individuals, TelexFree participants become eligible for revenue sharing bonuses of up to 3% of the TelexFree’s VOIP program sales.

Troublingly, TelexFree allowed certain participants to join the scheme despite prior run-ins with the law. TelexFree highlighted one such participant, Sann Rodrigues, as a top promoter in the world on the TelexFree website.

Rodrigues, a self-proclaimed millionaire, had previously operated a similar multi-level marketing phone card fraud shuttered by the SEC in 2006.

Rodrigues past should have set alarm bells within TelexFree, but sadly he was heralded as a hero at TelexFree events and instead applauded as he simultaneously ripped those off giving the applause.

Before we continue, please let the above link sink in. And to any TelexFree affiliates reading this, anyone who tells you TelexFree has plenty of money to pay everyone is, to put it bluntly, absolutely full of shit.

In 2012 and 2013, TelexFree identified 4,845,576 VOIP program transactions totaling $238,395,353.80. Net revenue raised by TelexFree from VOIP program sales was significantly less due to substantial commission payments.

Importantly, Carlos Wanzeler could not identify the number of individuals purchasing only a VOIP program without also becoming a participant.

Wanzeler provided wildly varied estimates when challenged to identify the number of VOIP programs sold to non-participants.

If anyone ever asks me why I hold retail sales in such high regard when conducting BehindMLM MLM company reviews, the above is why. Non-participant retail sales matter to US regulators.

Anyway, back to how TelexFree couldn’t pay everyone out – despite all their promises to:

Over the same period, TelexFree had 783,771 investments of either $289 or $1375 totalling $880,189,455.32.

Assuming each participant invested only $289 and did no more than post one advertisement per day, TelexFree owed participants a total of $799,446,420.

Alternatively, if each participant invested only $1375 and did no more than post five advertisements a day, TelexFree owed $3,997,232,100 to its participants.

Note that I used conservative figures and estimated TelexFree’s liability at just over $1,000,000,000 last week. I was closer to the lower-end of the scale but well within the Securities Divisions’s ballpark.

Even more so when you consider my conservative numbers and the Securities Divisions’s next statement:

According to data provided by TelexFree, $1375 investments accounted for 88% of transactions through Massachusetts based participants.

Even if only 50% of all participant investments were for $1375, TelexFree would still owe $2,398,897,200 – a number that far exceeds TelexFree reported total revenues over the same period.

This figure of almost $2.4 billion, does not even include further bonuses, recruitment commissions and revenue-sharing.

I based my calculation on 50% of the revenue being $289 investments, hence the lower $1 billion figure. But it’s interesting to note the Securities Division used the same 50% conservative figure as an example in their complaint.

Proof yet again that common-sense due diligence cannot be substituted.

Meanwhile it was only a few hours ago that I passed the following comment on the mythology that there was any difference between Telexree’s Brazilian and US operations:

Both James Merril and Carlos Wanzeler, self-proclaimed founders of TelexFree hold 50% ownership interest in the United States entities and 20% and 40% interests respectively in the Brazilian entity.

Now the following, pertaining to resident TelexFree YouTube clown Carlos Costa, was completely new information to me:

Carlos Costa, head of Brazilian operations and longtime friend of Wanzeler, was an owner of TelexFree LLC. In late 2013, Costa withdrew his ownership for what Merril characterized as “legal reasons”.

Legal reasons? Nothing suss…

Both Merril and Wanzeler testified to transferring at least $3,000,000 to Costa long after Brazilian authorities shut down Ympactus operations.

Oh snap! Costa is sitting in his YouTube castle sweet talking affiliates, all the while being fed their invested money on the sly? These fuckers are notorious.

As to the recent payment problems TelexFree affiliates have been experiencing, word on the grapevine was iPayout was trying to get TelexFree debit cards secured with a new provider after their old one inexplicably gave them up.

Here’s what was going on behind the scenes:

Over two years of operations, TelexFree has employed multiple financial accounts, including domestic and international bank accounts and various online payment processors, to facilitate the fraudulent offer or sale of securities in Massachusetts.

Almost all financial institutions have terminated their relationship with TelexFree after only a few months of business.

TelexFree operations have become a risk that financial institutions are no longer willing to bear.

As described by one financial institution, “no US bank or processor… will accept your [TelexFree] business given that you are on month five of the Visa Chargeback monitoring program. You are only one of three merchants in the USA on month five so you are a real hot-potato as they say.”

Whether or not TelexFree’s long-standing US-based payment processor iPayout stuck with them to the bitter end or not is not immediately clear.

Sanderly R. De Vasconcelos (aka Sann Rodrigues) – previously barred by the SEC from making the offer and sale of securities, credited as a “top promotor of the world” of TelexFree

For their part in the orchestration of the $1 billion dollar TelexFree Ponzi scheme, they have been issued a cease and desist by the SEC. They are also now required to

provide an accounting of all proceeds which were received as a result of the alleged wrongdoing, and to offer restitution to and fairly compensate investors for those losses attributable to the alleged wrongdoing

disgorge all profits and other direct and indirect remuneration received from the alleged wrongdoing

The SEC are also requesting the court “impose an administrative fine” on the defendants, the amount of which is to be determined at a later date.

Lawyer up boys, it’s time to pay out those you stole from.

Here at BehindMLM we’ve been covering TelexFree for nearly two years. In light of the SEC’s complaint and probable conclusion to the global $1 billion Ponzi scheme TelexFree represented, I’d like to personally thank the scores of readers who contributed via comments and emails.

To those readers, the helpful translators who helped me get my head around much of the Portuguese and Spanish material I found myself dealing with, Google Auto-translate for being there as a last resort, the various members of the Brazilian media I’ve been in contact with, the TelexFree affiliates who at one time or another provided me with insider information and/or documentation, various relatives of some of the ringleaders involved, the BehindMLM regulars who’ve been with me for a number of years now and anyone else I might have forgotten to specifically mention, I offer up my most heartfelt of thanks.

And of course finally to you, the readers of BehindMLM. This site isn’t what it is without you.

Footnote: It should be noted that this filing comes from the Massachusetts Securities Division. The SEC at a federal level are yet to step into the fray.

SOL: I feel sorry for all of the brazilians that invested and thought this was legimate.

I don’t. Brazilians been warned since late 2012 and in 2013, even after Brazilian justice blocking TF in Brazil, people insisted in faking documents and information just to register themselves in “TF International”.

This could not have come in a better timming. Just yesterday Carlos Costa was screaming in one of his videos how Brazilian Judiciary should use the same approach in TF’s case as the American Judiciary (talking about the bankruptcy).

Well… Brazilian justice said it was a SCAM almost 1 year before SEC charging TF with the same accusation.

Telexfree was in serious trouble 12 months ago but people kept investing or reinvesting up until this week despite people saying forget telexfree its a ponzi.

Brazil shut this scam down 12 months ago and telexfree still raked in 100s or millions dollars . Behind MLM was giving accurate information regarding telexfree demise. Why are people so shocked or surprised telexfree is over.

Do the research before you part with 1000s dollars not afterwards. What happened to plain old conmen sense I only invest in business or people with a proven track record over many years not months. If something is to good to be true it usually isn’t good at all.

Those ROI was from another planet, hey people have you forgotten the world is in recession or still recovering or bankrupt. At best your getting a penny or two interest on your savings.

The Gargantuous ROI were just to get you to part with your money hence why so many Dummies make a video and post on You tube. I did not invest in telexfree I heard of telefree a year ago but the axe was already falling.

I apprecite the very useful info on this website, and the efforts made to uncover all of these scammers. However, I see some commenters who think it’s funny that some people lose their life savings.

Eveyone gets (and will get) screwed somehow in their lifetime. We all make mistakes. Don’t enjoy watching others suffer. I know “you told them so”, but tomorrow might be your turn to get a taste of it.

Oz: I saw one clown pointing to the word “alleged” in the complaint and proclaiming the SEC had no proof TelexFree is a Ponzi scheme

Yeah, yeah… We in Brazil have been listening to that BS since Acre’s PP froze TF/Ympactus assets.

I bet Carlos Costa will come up with another video soon enough saying that there’s no need to worry because SEC is wrong about everything, or that the charges are just a speculation, or that all is but conspiracy of the telecom companies…

Same old thing they’ve been saying non-stop in Brazil since June last year.

Lost all I had! Not from USA, from UK! did not know all this matters, saw my brother was earning, so i joined with all I had. so the bankruptcy case is not valid now? or they can still claim it within 14 days? if the case get rejected, will they pay us.

Telexfree website is down! No access to backoffice or anything at this time (~3P Eastern). You are able to access ewallet outside of telexfree in case you have some money caught up in ewallet.

I checked and the money withdrawed from TF on last Tue 4/8/2014 has not posted yet to ewallet nor do I expect it to. I’m sure there have been mass withdrawals lately, which probaly have caused significant cash flow problems for TF.

Sadly, I think that TF will point their finger at the government and blame forces beyond their control for their downfall and their inability to fulfill their old contracts. The government action will be a perfect excuse for them to say that it’s not our fault that we can’t pay you.

I lost money in this scheme, but I consider this a learning experience and am thankful to have found this blog, which have made me a smarter, more skeptical, more ethical investor.

BTW that dude in comment #30 has a hot mama. (That’s the only thing I got out of the video after watching the whole thing)

oz,
i have a lot o friends who sold their cars, houses, business etc… to joint telexfree, most of tham ilegal immigrants in state of mass, how could this people have a light in the end of the tunnel to get anything back?

im trying to help them as much as i can becouse i live just 20 min from the marlborough headquarter and can (could) just drive by and ask question but im not an expert. legally what these people could rely on??? thanks for your enswer. and good job on the coverage of this telexfree scheme.

Lol, even with the SEC pounding on their door and dragging them away, TelexFree still found the time to go to court today and file a bunch more crap for the Chatper 11.

Despite the application being rejected due to incompetion, they are asking the court “speed up” the first hearing because “irrepairable harm” will be caused to their named creditors (Wanzeler, Costa and Merril’s family and friends).

Oz:
Affiliates are reporting all TelexFree products (VOIP) just went dead too.

Interesting the First Day Motions on 4/14 asked permission for Telexfree LLC to pay bills. Without any action taken on that motion it appears as if Telex’ tank has run dry. They had no authority to pay their carriers.

Oz:
Lol, even with the SEC pounding on their door and dragging them away, TelexFree still found the time to go to court today and file a bunch more crap for the Chatper 11.

Despite the application being rejected due to incompetion, they are asking the court “speed up” the first hearing because “irrepairable harm” will be caused to their named creditors (Wanzeler, Costa and Merril’s family and friends).

What about if they start it, they will have more “chance” or is just a strategy to do something.

The SEC explicitly stated in their complaint that the Chapter 11 will interfere with their case against the company. They aren’t going to let it go through.

And in any case, you don’t get hearings when your application has been rejected. You need to submit a valid and accepted Chapter 11 bankruptcy proposal before you get to appear before a judge and plead your case.

Dar… this is just a emergency to transfer the money!! They know they will lose everything! The ship are sinking!! I just imagine, even if it happens, the SEC can easily undone it and get the money back, right?

Another thing I found striking in the MA state Securities investigation is that this entire billion dollar revenue enterprise including customer service for their golden VOIP product was run by a skeleton crew of seven people who got paid peanuts. (The total payroll expenses for these staff was declared at $120,683.88 in 2013).

According to research, those responsible for the business have used money from investors to pay personal expenses, including restaurant bills.

Bank data show that in December 2013, Carlos Wanzeler received $ 7 million from Telexfree, and transferred $ 3 million to Carlos Costa. At the same time, another $ 12 million were transferred to various investment agencies and $ 1.7 million for the Rio club Botafogo, who happened to be sponsored by Telexfree.

Let’s not forget about WINGSNETWORK running something almost like this, I believe it’s based in Portugal, you invest $1500 get 2 friends to do the same and voila! $750 a month for 1 year, plus some other bonuses if you bring more people in.

It’s getting so popular here in MA that the CEO Carlos Barbosa landed here last month to cheer up the associates. It’s spreading like a virus.

So I was on the 5P Steve Labriola conference call with 800+ other people. I have never been on a conf call with that many people before and it was quite noisy in the beginning. Then about 5-10 min into the conf call everything goes mute and the man of the hour Steve enters.

His speech was very short and he basically came on to say that he has no answers at the moment and leaves with the promise that he would be coming back at 5P every day on conf call no matter what even if he has to say the same no answers crap.

I’m sure there was a collective gasp and OMG amongst the affiliates as they had been waiting all day to here from Labriola. The high level promoters were basically referring all their victims to wait for this call and I’m sure there was major disappointment.

But these epic fails have come to be expected of this sham company known as TelexFree.

Easy Peasy, what could be simpler and better for everybody? Uh…Jeanine. seems you got it just a bit backwards. If assets were 3 times liabilities they wouldn’t BE there looking to get excused from paying their debts. They’d be what’s called a “Going Concern”, AKA “solvent”, AKA “capable of paying their affiliates, promoters or whatever you call the suckers these days”.

So this guy on post #81 is confident that TF is gonna go through all of this.. what really gets me though is he mentions GOD in his speech.. c’mon man.. God has nothing to do with SCAM.. but BECAUSE of Him and His Justice, TELEXFREE IS GOING BYE BYE!!

I hope this ends well for the victims and these “brilliant business people” end in JAIL … just like Maddoff did..

What are the chances TF’s website is down because they are just trying to hide the servers and/or data away from justice?
As a reminder, they have already pulled the “we have no access to any data” in Brazil’s justice.

Could they be moving it somewhere outside US jurisdiction? Could they just be erasing every trace of information and then blame it later on the “IT guys”?

Eddyo: It is going around that a federal judge dismissed the SEC case. Any truth in this story?

No

The Federal Bankruptcy Judge in Las Vegas signed an Order approving an expedited Hearing. That is all. The Hearing is April 17.

Being under the jurisdiction of the BK Court, Telexfree can not even flush the toilets without approval. In this case TF is asking to maintain the most basic of services, such as keeping the electricity on and permission to pay their Voip carrier.

There’s some other stuff but its all concerned with the basic housekeeping services any business needs to operate.

The Hearing can be continued indefinitely at the Judge’s discretion and because the Hearing is being conducted on shortened notice anyone can show up. The State of Massachusetts will almost certainly do so… in which case its highly probable that Telexfree’s lights will go out forever.

It is going around that a federal judge dismissed the SEC case. Any truth in this story?

I doubt it. Why would a federal judge be hearing a Masachusetts case? (might be showing my legal ignorance here).

As for the tax thing. I just woke up but people posting about how “TelexFree won” their bankruptcy should note, the entered documents are proposals, not final orders. TelexFree are supplying the Judge with proposed orders to be signed.

How they expect anything to be signed when their initial application was rejected and has not been refiled escapes me.

#1 The promoters that were net profitable. Will they get to keep the money?

#2 Is there a chance some people will get jail time? if so who?

1) Promoters may keep some of the money. This is how this works. DOJ comes to Promoter X and says: give back 2 million net gain you had. Promoter X says I spend some so I only have 1.5 Million. On top of that I will be willing to part with only 1 million. If you want all th money go after me in court. I will spend all of them on layers to stretch this case for foreseeable future. At this point DOJ looks if they have enough for criminal prosecution. If not they agree to term and Promoter X comes out scoots free with some money left.

2) I see only 2 people that can be charged, but my guess DOJ will drop those charges if they can flipped on Costa.

Diego:
What are the chances TF’s website is down because they are just trying to hide the servers and/or data away from justice?
As a reminder, they have already pulled the “we have no access to any data” in Brazil’s justice.

Could they be moving it somewhere outside US jurisdiction? Could they just be erasing every trace of information and then blame it later on the “IT guys”?

I’ve seem that in other 2 brazilian scams, recently.

Just my 2 cents…

Actually you did not read previous comments from OZ and others. In US when some company declared a scam, people from DOJ or local police come to confiscate computers on the same day or next day. It is common theme.

I am 99% sure that office computers got confiscated already. That does not mean that telexfree could not keep most of data necessary to run back-office on backup computers. This way they will restart back-office website (without payouts off cause). This charade is necessary to prolong the agony of innocent.

holytroller:
Imprecise as always. The SEC is a FEDERAL AGENCY, the Securities Division of any State is not quite at the same level.

Again, I have no stake in anything MLM, I am just terribly amused by the pompous attitude and bickering and yes, reporting on this site. A flair all of it’s own

Actually local securities authorities can put a press on only company in its homesteads even better that SEC. Just ask many Wall Street companies how they like previous NY AG and how much did they have to pay for cases to go away.

In this case of cause SEC and DOJ will be leads but locals could have done good job too if it was up them.

Oz: I might still just be half asleep but all I see on the KCC website is the proposed order for the meeting, submitted by TelexFree this morning. There’s no finalised order, signed or otherwise.
Or are you pulling additional documents from Pacer?

I see only 2 people that can be charged, but my guess DOJ will drop those charges if they can flipped on Costa.

Um there are several reasons for quite a few of these assholes to be going to prison. My faaavorite one on this particular day in the USA iiiiis?????…..It’s “tax” day.

This is only the begining….my feeling is that there will be a few different government agencies jumping in for their wack at these guys. Lets say today’s issues disapeared like the brain in Labriola’s head did some time ago….

The fact that 1099’s haven’t gone out to thousands of the contractors is a bit of a problem for my friends.

hey guys, you should start looking out for other schemes like these… there is one going on right now called 1clickday.com its just like telexfree and it just started also, about 6 months ago.

You can not look for all of them. There are hundreds if not thousands of such scams running at any time. Until government start treating running pro-scam forums as a crime, there is no way to stop this menace.

Dorothy:
I see only 2 people that can be charged, but my guess DOJ will drop those charges if they can flipped on Costa.

Um there are several reasons for quite a few of these assholes to be going to prison. My faaavorite one on this particular day in the USA iiiiis?????…..It’s “tax” day.

This is only the begining….my feeling is that there will be a few different government agencies jumping in for their wack at these guys. Lets say today’s issues disapeared like the brain in Labriola’s head did some time ago….

The fact that 1099′s haven’t gone out to thousands of the contractors is a bit of a problem for my friends.

I meant I see two in USA that can sure this for prosecution. But as criminal investigations go, you flip small fish on medium fish and you flip medium fish on large fish. Thats why some in US may end up with probations with they can build air tight case on Costa.

So from what I understand my upline gets to keep all the maney they fraudulently took from us, now they move to Wings and make some more money until it gets close down, then they move to another one, and so on and on.

Wow, what a great way to make a living, stealing from Aholes and getting to keep all the money without having to worry about getting caught. And if they do get caught they can say they thought it was a real business and sorry I don’t have the money anymore, I gambled it all away…

Given the expedited nature of the request , signing the Proposed was probably the quickest way to get it on the docket. I would not be surprised if Mass. wrote up an objection and electronically filed it tomorrow. A quick call to the Court clerk and the Mass findings and ponzi allegations would be in the Judge’s hands by noon.

Galvan fully realized what Telexfree was up to so he must be prepared to respond. Maybe he will even attend the Hearing telephonically. (VOIP of course)

The worst part is that people do not learn. At full drop TF is already in full pre-launch its sustitiuto, WISH CLUB. With the same system without actual product where you pay an entry charge and display advertising.

In this scheme important promoters of TF, BBOM and WCM777 involved. It even seems that there is a direct link with the latter and some other scheme declared illegal in Brazil before.

Its official launch will be in a few days, base their operations in Spain trying to avoid legislation and controls in countries like Brazil or Colombia. WISH CLUB spreads like wildfire among Hispanics, well sure there will be many victims.

In Madeira, the people are into other schemes: Wings Network, wenyard, etc etc.. A report in RTP Madeira (TV channel) 2 two days ago, said that Madeira Island already has 30,000 customers in WingsNetwork. Every week there are meetings / conferences a Hotel.

Rwandans appeal to government to help them recover their TelexFree Ponzi losses:

Rwandans who invested in the former TelexFree Rwanda Ltd company have appealed for government’s intervention to help them recover their lost finances from the US based company.

“We want our government to engage the US (embassy) Commercial Attaché. It was a registered company in Rwanda and government should defend us,” James Gihana, one of the Rwandan investors said in an interview yesterday.

He said they had petitioned the Ministry of Trade and Industry, Rwanda Development Board and the Auditor General’s Office to intervene but they are yet to get feedback. Gihana declined to disclose the amount he had invested, saying it was personal matter.

But a source said individal Rwandans could lose as much as Rwf44 billion.
When contacted, Emmanuel Hategeka, the Permanent Secretary in the Ministry of Trade and Industry, said it was difficult for government to intervene.

“If the company had assets in the country it would be easy for us to seize the assets and compensate the members but now I don’t think they had assets here. What we can do is only to look into the contractual framework between the company and members and advise accordingly,” he said.

Yeah, good luck with that guys. Don’t they know TelexFree disowned them when they got kicked out of the country?

M_Norway: That’s rather unbelievable. I believe RTP has got the data from some “insider” in Wings.

I believe that number may refer to Wings accounts, not Wings real users. I still find very hard to believe Madeira had 40.000 users in there by last January. It probably was simply 40.000 accounts, which is a much more reasonable figure. Some users have a lot of accounts.

No. Whether this ends up in Receivership or Bankruptcy, private actions (class action in this case) will be automatically stayed (prohibited.) This means that the Reciever or Trustee has first shot at all funds and assets of Telexfree as well as litigation rights against the culpable insiders.

@Restelo’s Old Man/M_Norway
Regarding Madeira having 41k users in Telexfree.

Considering one that their main facebook closed-group has approximately 20.000 users (let’s say 75% has accounts), i think it’s safe to say the numbers are correct if not a bit higher by the time it was shutdown.

Also, in order for the main ‘promoters’ in Madeira Island (250k habitants) get a monthly(3 weeks?) ROI of around 300k a lot of people had to be under them.

It’s shocking to realize that almost 20% of Madeira fell for this. A lot of people i know, whom i had in great consideration and considered extremely intelligent and smart people, fell for it. And i’m not talking of “hey, i know what this is, i’m going to take a risk” … i’m talking of “this is the new big thing, people are paying their debts with this, we actually work while posting ads, you are just an envyous person for saying that”. Needless to say, this all situation also helped a lot of us to realise who can be trusted and considered a smart person and who is plain out ignorant and dumb.

SANTO DOMINGO. The Specialized Prosecutor for Money Laundering and the District Attorney’s office in Santo Domingo initiated an investigation into the alleged laundering of assets, fraud and violations of the Security, Monetary and Financial laws which involves the TelexFREE Dominicana commercial enterprise. The company has allegedly affected 150,000 persons all over the country with its actions.

Considering one that their main facebook closed-group has approximately 20.000 users (let’s say 75% has accounts), i think it’s safe to say the numbers are correct if not a bit higher by the time it was shutdown.

Also, in order for the main ‘promoters’ in Madeira Island (250k habitants) get a monthly(3 weeks?) ROI of around 300k a lot of people had to be under them.

Remember that the 41K figure is from last January. Most of the people close to me entered it after that date, after it being noticed in the local television channel that people were getting big profits from it. Most of them now lost everything they gambled in.

It is obvious as well, from the facebooks of both Graça Luísa and Paola, that many of their downlines are not from Madeira as well. I don’t know what was the source for the 41K number, but I seriously doubt it.

If we discount the children and the internet-impaired, it would mean that by January a third to half of the target population was already hooked to it, which I find quite impossible. I wouldn’t doubt, however, that current numbers (April) would be quite high.

I’m a former co-worker of Graça Luísa, and remember her as a cunning girl doing a respected work, but obviously under her potential and expectations. Since Telexfree started his free fall to nohere, she and Paola seem to be being hailed as saints on their facebookpages, inclusively by well respected people here.

I suspect they are giving away their (ill gained) money to compensate for the losses of their downlines. If that is the case, the situation here will not be as bad as predicted, at least for the people part of their teams.

Restelo's Old Man: Remember that the 41K figure is from last January. Most of the people close to me entered it after that date, after it being noticed in the local television channel that people were getting big profits from it. Most of them now lost everything they gambled in. It is obvious as well, from the facebooks of both Graça Luísa and Paola, that many of their downlines are not from Madeira as well. I don’t know what was the source for the 41K number, but I seriously doubt it. If we discount the children and the internet-impaired, it would mean that by January a third to half of the target population was already hooked to it, which I find quite impossible. I wouldn’t doubt, however, that current numbers (April) would be quite high.

I’m a former co-worker of Graça Luísa, and remember her as a cunning girl doing a respected work, but obviously under her potential and expectations. Since Telexfree started his free fall to nohere, she and Paola seem to be being hailed as saints on their facebookpages, inclusively by well respected people here. I suspect they are giving away their (ill gained) money to compensate for the losses of their downlines. If that is the case, the situation here will not be as bad as predicted, at least for the people part of their teams.

Pay close attention to what she states in the so called “open letter addressed to the TF administration”.

She’s giving back ONLY the $456,342 listed on the top 30 creditors list to help recover the “company”…and what is that worth NOW?!

I guess we both agree that the numbers are correct or a bit higher, frightening nonetheless. I agree that the number of accounts has probably increased with the genious move by telexfree, warning that the plans would change, it opened a window of opportunity to get more affiliates under the premise that “it’s better to get in now, things will change’.

Not knowing any of those top promoters (such as Graça Luisa, or any of the others) i honestly hope they do the right thing and refund their latest entries.

Still, i’m unable to feel pity for those persons, same way i don’t expect pity for doing something stupid.

As for some promoters, that made vain promisses and lied as for how longer this scheme would last (heard people claiming it would last 1 year or 2, even people that claimed it would never ever close) in order to make more easy money, i hope they get what they deserve.

Hello All.
I just wanna share something that I thought was weird. The support portal site is still functioning. Who’s running it? What kinda support can they possible be providing right now? Check out the link: support.telexfree.com/Main

I’m from Madeira, but live and work in the mainland. I earn a decent living in IT and people back home see me as intelligent and balanced. Still I warned my family and friends that this was a scam and no one cared. The money just came pouring down and nobody cared.

I couldn’t stop it, how could I? I know some people are in the green, others in the deep red, and who will they turn to bail them out? Yes, you guessed right, it’s the people who work their ass off to make a living and pay their bills. What a wonderful world.

and yeah the 41k number is probably right, seeing as 95% of people i know are in it

What’s next ? The Madeiran government needs to make plans : Suicides are a major possibility. Though it’s only money and it’s a cowards way out, cos the proper thing is to face up to your responsibilities and rebuild life brick by brick.

– Does Madeiran government need to look to ‘victims’ ?

I don’t mean people who put money in of their own free-will, but there are 3 other classes.

1. Coerced money, e.g. where grannies ‘pension’ was put in on the promise she would get it back.
.. That is stolen money.

2. Madeiran Businesses like doctors etc. who are going to be under pressure cos their customers are going to plead “we can’t pay, we don’t have cash”.

3. The Madeiran taxpayers who are going to have to pay for this mess, eg. pay income support to kids whoses families lost all their money.

– Their might be fights between ‘winners’ and the losers they introduced into the scheme.
.. The lazy thing would be to let ‘winners’ keep their money, but how can profits be considered to be honestly theirs if it originates from fraud ?

– Maybe authorities should pay attention for people and money trying to leave the island.

But when state investigators learned on Monday of the company’s filing for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Nevada, Galvin said “any concern about freezing the assets was gone.”

“We felt we had to act,” he said, to begin securing any assets the company still had and try to stop more customers from signing up with the company.

I want to say thank you to Secretary of State William F. Galvin for an outstanding job. “BOSTON STRONG”!!!!

I believe a company that has within its body one of the largest legal authorities [in the matter], which is the attorney Gerald Nehra … do not believe the attorney Gerald Nehra lend his name to be on the Telexfree site. (….) My trust us was [in] that is the legal body has Gerald Nehra, then the thing is correct. So I can not answer you. In my view it is not a pyramid, but who has to answer this is an advocate of Telexfree.

My thanks in advance to anyone who can provide a clearer translation than Google. But, once again we have Gerry Nehra trading his good name and a little bit of his soul for the money that (yet another) ponzi scheme operator will give him.

Nehra was once the most (or one of the most) respected attorneys in the MLM field now it’s almost impossible to see how he is any different than any of the other ponzi pimps out there.

He many not have had a position in the comp plan but he took money to lie to the marks and used his “reputation” to legitimize fraud. And not for the first time.

But when state investigators learned on Monday of the company’s filing for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Nevada, Galvin said “any concern about freezing the assets was gone.”

“We felt we had to act,” he said, to begin securing any assets the company still had and try to stop more customers from signing up with the company.

I want to say thank you to Secretary of State William F. Galvin for an outstanding job. “BOSTON STRONG”!!!!

He smelled a “smash-and-grab the piggy bank” in the making from a mile away.

I guess we both agree that the numbers are correct or a bit higher, frightening nonetheless. I agree that the number of accounts has probably increased with the genious move by telexfree, warning that the plans would change, it opened a window of opportunity to get more affiliates under the premise that “it’s better to get in now, things will change’.

My experience is that the main culprit was the RTP coverage in January (I have to admit that I myself had thought for a nanosecond if that would worth joining in, indeed).

Anyway, I was convinced that the 300K number refers to the total credit they owned her, not just last week or last 3 weeks. I seem to remember that Telexfree had a ceiling for withdrawals, in that case that value would merely be what she couldn’t withdraw or exchange with other people for money.

My thanks in advance to anyone who can provide a clearer translation than Google.

I hope it helps.

Is Telexfree a financial pyramid?

I believe that a company that is represented by one of the TOP authorities in the field, who is the lawyer Gerald Nehra… I can’t believe that Gerald Nehra would lend his name to be used on Telexfree’s website…

I believed that, if the lawyer was Gerald Nehra, then the business was legal. So, I can’t give you a answer. In my opinion it is not a pyramid, but who has to answer is the lawyer of Telexfree.

My thanks in advance to anyone who can provide a clearer translation than Google.

My take (I’m not a professional translator, though):

I believe a company that has in his legal body one of the biggest authorities [in the subject], meaning lawyer Gerald Nehra… I don’t believe lawyer Gerald Nehra would lend his name to be displayed at Telexfree website. (….)

My confidence was that, if the legal body includes Gerald Nehra, then it’s the right thing. Therefore I can’t answer you. In my view this is no piramid, but who has to answer to that is a Telexfree lawyer.

Restelo's Old Man:Anyway, I was convinced that the 300K number refers to the total credit they owned her, not just last week or last 3 weeks. I seem to remember that Telexfree had a ceiling for withdrawals, in that case that value would merely be what she couldn’t withdraw or exchange with other people for money.

That makes sense. I wasn’t aware they had a cap on how much you can withdraw from their accounts. With that in mind, it becomes quite difficult to grasp the true values of their monthly incomes.

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